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Arch Capital Group Ltd. (ACGL) is a Hamilton, Bermuda-based insurance company with a market cap of $41.5 billion that carved out a name for itself as a leader in risk management and reinsurance. With a focus on delivering tailored solutions, Arch Capital grew from a niche player to a global insurance powerhouse. Over the years, it expanded its portfolio, offering products like primary and excess casualty, workers' compensation, and professional indemnity insurance.
Companies worth $10 billion or more are generally considered "large-cap" stocks and Arch Capital fits this category perfectly, signifying its substantial size, stability, and dominance in the insurance industry. Arch Capital didn’t just stumble into large-cap territory - it earned its way there. The company’s ability to diversify its offerings, manage risk, and grow through smart acquisitions helped solidify its place in the big leagues.
Despite its notable strengths, the leading property and casualty insurer has dipped 2.5% from its 52-week high of $114.65, which it hit last week on Sept. 4. Shares of ACGL are up 11.1% over the past three months, outperforming the broader Dow Jones Industrial Average Index’s ($DOWI) 5.2% return over the same time frame.
Over the longer term, ACGL has surged 50.4% on a YTD basis and 44.6% over the past 52 weeks. In comparison, the DOWI has surged 8.3% in 2024 and 18.1% over the past year.
ACGL has been staying above its 50-day moving average since mid-August, and it’s not the first time. For most of the past year, the stock has comfortably floated above that line, hinting at consistent strength. Even more impressive, ACGL has been trading above its 200-day moving average since mid-January, solidifying a bullish trend.
On July 30, ACGL caught some eyes with a 1.2% rise after its Q2 earnings report blew past expectations. The insurance powerhouse delivered an impressive EPS of $2.57, outpacing estimates by a solid 18.4%. Fueling this momentum, ACGL pulled in $364 million in net investment income, while its underwriting income soared 25.7% year over year to $762 million.
Not stopping there, on July 22, ACGL gained regulatory approval to acquire Allianz’s U.S. MidCorp and Entertainment businesses, boosting its market reach. Investors noticed, sending the stock into a steady upward climb.
Rival American International Group, Inc. (AIG) has underperformed ACGL with 22.1% gains in the past 52 weeks and a 7.5% return on a YTD basis.
Given its recent outperformance compared to the industry peers and the Dow Jones, analysts are upbeat about ACGL’s prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering it.
Although the mean price target of $112.41 reflects a marginal upside potential from current levels, the Street-high price of $125 implies that the stock could rally by as much as 11.9%.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
